Goodbye Net Neutrality: FCC Backs Down on Internet Traffic Equality

By Jeff Gamet

Apr 24th, 2014 1:30 PM EDT

After a January ruling from a federal appeals court struck down regulations requiring that all Internet traffic be treated equally, the Federal Communications Commission (FCC) promised revisions to ensure Net Neutrality doesn't die. Now it seems that isn't the case because the FCC has changed course and instead will let Internet service providers charge companies like Netflix and Facebook for preferential treatment and guarantees of faster data transfers through their networks -- and that's a change that flies in the face of what was promised in Net Neutrality.

The foundation of Net Neutrality is the idea that all traffic flowing through the Internet is treated equally regardless of what it contains or where it starts. Streaming movies and music, for example, would pass through data pipes just the same as email messages and app downloads.

Verizon and other Internet service providers, however, weren't on board with requirements that would stop them from striking deals where they charge content providers fees to guarantee their content moved between network nodes without any slowdowns. They felt companies like Netflix, which use substantially more bandwidth than other companies, should pay for that heavy usage because ISPs need to pay for the infrastructure to make sure their networks don't fail under the heavy load, and so Verizon sued to reverse the FCC's rules.

While the court agreed that the FCC could regulate Internet traffic restrictions, it gave the win to Verizon on a technicality because the Commission can't treat companies as if they are -- and aren't -- utilities at the same time. The court urged the FCC to find a way to impose its regulations within its own guidelines, but now it looks as if that isn't happening.

Instead of moving forward with rules that would prohibit companies like Comcast and Verizon from charging for guaranteed bandwidth, the FCC is stepping aside and saying such deals just need to be fair. The FCC also said ISPs can't slow down or throttle Internet traffic for companies that don't pay up, but also said that it's OK to charge for guaranteed faster throughput.

To-may-to, to-mah-to. ISPs can't threaten to cut bandwidth for specific domains or services, but they can charge for faster data throughput.

For companies like Netflix, that means they have to strike deals with ISPs or face the issue they've already been trying to overcome: degraded and stalled video streams. Netflix must've seen the writing on the wall, because it has already started working on deals for guaranteed bandwidth.

With deals like this in place, end users should get exactly what they expect in the form of content that looks as good as they've been promised, and without stutters and stalls in their video and audio streams. For content providers, it means they can deliver the level of quality they want.

Those quality audio and video streams will, however, come at a price -- which is exactly what companies like Verizon, AT&T and Comcast want. The money to cover those costs has to come from somewhere, and in the end that means customers. Unless content providers choose to absorb the extra costs, it's a safe bet we'll see that reflected in our monthly service bills.

Show Me the Money

While Verizon and other ISPs look like money grabbing bad guys in this scenario, there are plenty of black hats to go around, so to speak. Netflix, YouTube, and other companies that stream large amounts of data to their subscribers are using up a disproportionate amount of Internet bandwidth, but typically aren't paying ISPs for the extra infrastructure required to get that data to customers. On the other side of the coin, ISPs aren't opening up their systems to allow more traffic to pass through, which is essentially throttling content bandwidth.

What the FCC originally tried to do was stop ISPs from demanding fees from content providers. With that idea dead in the water, content providers will have to pay up or face delivering lower quality video and audio streams to their customers. Popular websites, like Google, could face similar fees or be seen as offering lower performance compared to competitors like Microsoft's Bing.

The part that stings the most is that the FCC's new policy is presented as if it prevents ISPs from giving some companies preferential treatment on their networks.

Yes, Internet service providers will be prohibited from slowing down or blocking traffic, but they will be able to charge for faster data delivery, which really isn't any different from throttling. In the end, it doesn't matter if you're charging for faster access or just preventing slow access; it's just different ways to describe the same thing.

In the end, the FCC killed the spirit of Net Neutrality where all data is treated equally. Instead, they've given us the Animal Farm Internet where all data streams are equal, but some are more equal than others.